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Our Gasping Economy

Just in case you are still wondering why our economy is so bad … gasping for breath … the following might help to enlighten you. This of course is just one aspect of the assault on our economic system by Obama… an assault that has come from all sides.

With all Obama has done since taking office against business … what business owner in his right mind dares to spend money or make growing plans of any kind while Obama is still in office?  What entrepreneur dares to start any new business? How many Americans dare to spend on anything extraneous not knowing how any of these will eventually affect their finances?

With all the new regulations added to the new taxes imposed by Obama … businesses are lucky to stay alive today.

Can we survive another year of Obama?

Only if the Congress stands in his path .. but of course even that has not stopped Obama.  He just figures out a work around… never mind the constitutionality of anything .. and he is doing just what he said he would in his campaign…. fundamentally change this whole country.

The following is thanks to Americans for Tax Reform.

Since taking office, President Barack Obama has signed into law twenty-one new or higher taxes:

1. A 156 percent increase in the federal excise tax on tobacco:  On February 4, 2009, just sixteen days into his Administration, Obama signed into law a 156 percent increase in the federal excise tax on tobacco, a hike of 61 cents per pack.  The median income of smokers is just over $36,000 per year.

2. Obamacare Individual Mandate Excise Tax (takes effect in Jan 2014): Starting in 2014, anyone not buying “qualifying” health insurance must pay an income surtax according to the higher of the following

1 Adult 2 Adults 3+ Adults
2014 1% AGI/$95 1% AGI/$190 1% AGI/$285
2015 2% AGI/$325 2% AGI/$650 2% AGI/$975
2016 + 2.5% AGI/$695 2.5% AGI/$1390 2.5% AGI/$2085

Exemptions for religious objectors, undocumented immigrants, prisoners, those earning less than the poverty line, members of Indian tribes, and hardship cases (determined by HHS). Bill: PPACA; Page: 317-337

3. Obamacare Employer Mandate Tax (takes effect Jan. 2014):  If an employer does not offer health coverage, and at least one employee qualifies for a health tax credit, the employer must pay an additional non-deductible tax of $2000 for all full-time employees.  Applies to all employers with 50 or more employees. If any employee actually receives coverage through the exchange, the penalty on the employer for that employee rises to $3000. If the employer requires a waiting period to enroll in coverage of 30-60 days, there is a $400 tax per employee ($600 if the period is 60 days or longer). Bill: PPACA; Page: 345-346

Combined score of individual and employer mandate tax penalty: $65 billion/10 years

4. Obamacare Surtax on Investment Income (Tax hike of $123 billion/takes effect Jan. 2013):  Creation of a new, 3.8 percent surtax on investment income earned in households making at least $250,000 ($200,000 single).  This would result in the following top tax rates on investment income: Bill: Reconciliation Act; Page: 87-93

Capital Gains Dividends Other*
2011-2012 15% 15% 35%
2013+ (current law) 23.8% 43.4% 43.4%
2013+ (Obama budget) 23.8% 23.8% 43.4%

*Other unearned income includes (for surtax purposes) gross income from interest, annuities, royalties, net rents, and passive income in partnerships and Subchapter-S corporations.  It does not include municipal bond interest or life insurance proceeds, since those do not add to gross income.  It does not include active trade or business income, fair market value sales of ownership in pass-through entities, or distributions from retirement plans.  The 3.8% surtax does not apply to non-resident aliens.

5. Obamacare Excise Tax on Comprehensive Health Insurance Plans (Tax hike of $32 bil/takes effect Jan. 2018): Starting in 2018, new 40 percent excise tax on “Cadillac” health insurance plans ($10,200 single/$27,500 family).  Higher threshold ($11,500 single/$29,450 family) for early retirees and high-risk professions.  CPI +1 percentage point indexed. Bill: PPACA; Page: 1,941-1,956

6. Obamacare Hike in Medicare Payroll Tax (Tax hike of $86.8 bil/takes effect Jan. 2013): Current law and changes:

First $200,000
($250,000 Married)
Employer/Employee
All Remaining Wages
Employer/Employee
Current Law 1.45%/1.45%
2.9% self-employed
1.45%/1.45%
2.9% self-employed
Obamacare Tax Hike 1.45%/1.45%
2.9% self-employed
1.45%/2.35%
3.8% self-employed

Bill: PPACA, Reconciliation            Act; Page: 2000-2003; 87-93

7. Obamacare Medicine Cabinet Tax (Tax hike of $5 bil/took effect Jan. 2011): Americans no longer able to use health savings account (HSA), flexible spending account (FSA), or health reimbursement (HRA) pre-tax dollars to purchase non-prescription, over-the-counter medicines (except insulin). Bill: PPACA; Page: 1,957-1,959

8. Obamacare HSA Withdrawal Tax Hike (Tax hike of $1.4 bil/took effect Jan. 2011): Increases additional tax on non-medical early withdrawals from an HSA from 10 to 20 percent, disadvantaging them relative to IRAs and other tax-advantaged accounts, which remain at 10 percent. Bill: PPACA; Page: 1,959

9. Obamacare Flexible Spending Account Cap – aka “Special Needs Kids Tax” (Tax hike of $13 bil/takes effect Jan. 2013): Imposes cap on FSAs of $2500 (now unlimited).  Indexed to inflation after 2013. There is one group of FSA owners for whom this new cap will be particularly cruel and onerous: parents of special needs children.  There are thousands of families with special needs children in the United States, and many of them use FSAs to pay for special needs education.  Tuition rates at one leading school that teaches special needs children in Washington, D.C. (National Child Research Center) can easily exceed $14,000 per year. Under tax rules, FSA dollars can be used to pay for this type of special needs educationBill: PPACA; Page: 2,388-2,389

10. Obamacare Tax on Medical Device Manufacturers (Tax hike of $20 bil/takes effect Jan. 2013): Medical device manufacturers employ 360,000 people in 6000 plants across the country. This law imposes a new 2.3% excise tax.  Exempts items retailing for <$100. Bill: PPACA; Page: 1,980-1,986

11. Obamacare “Haircut” for Medical Itemized Deduction from 7.5% to 10% of AGI (Tax hike of $15.2 bil/takes effect Jan. 2013): Currently, those facing high medical expenses are allowed a deduction for medical expenses to the extent that those expenses exceed 7.5 percent of adjusted gross income (AGI).  The new provision imposes a threshold of 10 percent of AGI. Waived for 65+ taxpayers in 2013-2016 only. Bill: PPACA; Page: 1,994-1,995

12. Obamacare Tax on Indoor Tanning Services (Tax hike of $2.7 billion/took effect July 2010): New 10 percent excise tax on Americans using indoor tanning salons. Bill: PPACA; Page: 2,397-2,399

13. Obamacare elimination of tax deduction for employer-provided retirement Rx drug coverage in coordination with Medicare Part D (Tax hike of $4.5 bil/takes effect Jan. 2013) Bill: PPACA; Page: 1,994

14. Obamacare Blue Cross/Blue Shield Tax Hike (Tax hike of $0.4 bil/took effect Jan. 1 2010): The special tax deduction in current law for Blue Cross/Blue Shield companies would only be allowed if 85 percent or more of premium revenues are spent on clinical services. Bill: PPACA; Page: 2,004

15. Obamacare Excise Tax on Charitable Hospitals (Min$/took effect immediately): $50,000 per hospital if they fail to meet new “community health assessment needs,” “financial assistance,” and “billing and collection” rules set by HHS. Bill: PPACA; Page: 1,961-1,971

16. Obamacare Tax on Innovator Drug Companies (Tax hike of $22.2 bil/took effect Jan. 2010): $2.3 billion annual tax on the industry imposed relative to share of sales made that year. Bill: PPACA; Page: 1,971-1,980

17. Obamacare Tax on Health Insurers (Tax hike of $60.1 bil/takes effect Jan. 2014): Annual tax on the industry imposed relative to health insurance premiums collected that year.  Phases in gradually until 2018.  Fully-imposed on firms with $50 million in profits. Bill: PPACA; Page: 1,986-1,993

18. Obamacare $500,000 Annual Executive Compensation Limit for Health Insurance Executives (Tax hike of $0.6 bil/takes effect Jan 2013). Bill: PPACA; Page: 1,995-2,000

19. Obamacare Employer Reporting of Insurance on W-2 ($min/takes effect Jan. 2012): Preamble to taxing health benefits on individual tax returns. Bill: PPACA; Page: 1,957

20. Obamacare “Black liquor” tax hike (Tax hike of $23.6 billion/took effect immediately).  This is a tax increase on a type of bio-fuel. Bill: Reconciliation Act; Page: 105

21. Obamacare Codification of the “economic substance doctrine” (Tax hike of $4.5 billion/took effect immediately).  This provision allows the IRS to disallow completely-legal tax deductions and other legal tax-minimizing plans just because the IRS deems that the action lacks “substance” and is merely intended to reduce taxes owed. Bill: Reconciliation Act; Page: 108-113

 

In addition…..

Do you find it as interesting as I … the fight going on between the UAW and Chrysler concerning union members health insurance?   Where were the union workers when Obama was announcing his intent to take over our auto companies in his campaign?  They were focused on “hope and change” and missed his simple truth?  He announced it very clearly.

Of course … perhaps they all applauded at the thought of Obama running the car companies. If so.. are they applauding today?  Do they really believe they have a free bargaining road now .. with their union boss and Obama so tightly tied? It of course will go just as Obama and UAW president King decide it will go …with pats on each other’s shoulders and wonderfully patronizing ‘compassionate’ pats on the heads of each union member.

Interesting.

Wonder if they are all anxious to go vote once more for their “hero”?

The following is thanks to the Detroit News.

Health costs trip up UAW, Chrysler
But talks advance with GM as Sept. 14 deadline looms
BY BRYCE G. HOFFMAN, ALISA PRIDDLE AND CHRISTINA ROGERS The Detroit News

With just a week left until their contract expires, Chrysler Group LLC and the United Auto Workers are still far apart on key issues — including health care cost sharing — according to people close to the negotiations.

Talks between the UAW and Chrysler and General Motors Co. have intensified since the beginning of the week, and have now entered a critical stage.

A sort of shuttle diplomacy has developed between GM, Chrysler and the union. As The Detroit News first reported last month, GM has taken the lead in this year’s contract talks. Once GM and the UAW reach tentative agreements on major issues, union negotiators are taking that language to Chrysler.

GM CEO Dan Akerson met with UAW President Bob King Tuesday, a source close to the talks said, and negotiations are proceeding smoothly between the company and the union. But talks appear to have hit a snag at Chrysler.

“We are nowhere near an agreement,” one person familiar with the situation in Auburn Hills told The News Wednesday.

Nonetheless, all sides remain optimistic that an agreement can be reached between the union, GM and Chrysler by the time the contract expires Sept. 14.

The insider said Chrysler and the union disagree about an approach King is proposing on certain issues.

The UAW president has said he wants to look at creative ways to cut health care costs without reducing workers’ benefits. Chrysler believes workers should shoulder more of the cost of their own health insurance.

Chrysler’s hourly employees are responsible for about 7 percent of their own heath care costs, compared to 33 percent by salaried workers. The average American worker pays about 30 percent. The gap is narrower at GM.

“Chrysler indicated early on that health care might be an issue they would want to take to arbitration,” said Kristin Dziczek, a labor analyst at the Center for Automotive Research. “They feel they might win, but they lose control of the outcome if they go into arbitration. It’s way better if you negotiate an outcome.”

The UAW cannot strike Chrysler or GM under the terms of the federal government’s 2009 bailout of those companies. If they cannot reach an agreement on any issue with the union, it must go to binding arbitration. But the companies and the UAW hope to avoid that.

“I just feel like we can do better,” King said last week.

Union spokeswoman Michele Martin said Wednesday that “talks are progressing,” adding that there is no serious impasse at Chrysler.

Chrysler would not comment on the status of the talks, but confirmed the two sides stayed at the bargaining table all weekend. GM and the UAW also bargained through the weekend.